CCBJ-Nov-Dec-2011.zip

Energy Management and Efficiency grow more attractive to commercial & industrial firms as cost-cutting options dwindle. Despit - and to a large extent because of - the recession, the commercial and industrial market for energy management and energy efficiency services, systems and equipment is still growing. Consultants and solutions providers report that while many clients and potential clients are parsimonious with their capital and reluctant to add debt to their balance sheet, the opportunity to cut energy costs as a means to improve margins and profitability has become more compelling during the recession.

Along with the cost-cutting imperative, macro-economic trends like the "reshoring" of industrial manufacturing and the growth of utility incentives are supporting strong growth in the commercial & industrial (C&I) energy management and efficiency markets. This edition parses market niches from commercial office buildings to convenience stores and examines the business models of leading competitors ranging from industrial energy management specialists with less than 20 employees to giants of the industry such as EnerNOC, Schneider Electric and Veolia/SourceOne.

Because, C&I clients still typically need to be convinced about payback and non-financial benefits, marketing the value of broader based energy management services remains a challenge for vendors, so this edition provides a range of strategic insights and tactical suggestions from top experts.

The C&I energy management and efficiency market is part of the larger energy efficiency and demand response market, which CCBJ pegs at $59 billion in 2011, with 74% of revenues from sales of energy-efficient appliances and equipment, 13% in smartgrid/DR equipment and systems and 13% from energy efficiency/DR services. Analysis and insights in this edition focus primarily on the services segment.

Inside this edition:

Focus Shifts to Energy Management
Energy efficiency in the C&I space is becoming more of a management- and operations-driven industry and less of an equipment-driven one: Yes, there are still lots of lighting systems to retrofit with energy-saving lamps; HVAC systems to swap out for more efficient ones; single-speed drives to replace with variable-speed units; windows to reglaze; waste heat to capture. But the segment is increasingly moving toward becoming an energy management business that focuses fine-tuning the operations and maintenance of energy-using equipment, industrial processes and building spaces for greater efficiency.

Global Giants, Large and Small Consultants and Contractors Compete for the Business
Most of the firms selling energy efficiency and energy management solutions are small businesses them. There are dominant players like Honeywell, Johnson Controls, GE, Schneider Electric and subsidiaries of major energy firms like Chevron Energy Solutions and Chesapeake. But the majority of providers are small to mid-sized firms: contractors and vendors in refrigeration, HVAC, lighting, glazing, motors and other systems, as well as the energy specialists and consulting engineering firms that conduct audits, design energy-saving projects and energy management plans and oversee their implementation.

Cracking the Market Requires Top-Notch Financial Analyses and Presentations
The U.S. Department of Energy¡¯s Energy Information Agency estimated recently that on average 30% of the $200 billion spent annually to heat, light and operate commercial buildings (including schools) is wastes. One of the main reasons all that money is left on the table¡ªor leaking out the windows and doors¡ªis the chronic nemesis of the energy efficiency profession: corporate financial thinking that prioritizes short-term payback and doesn¡¯t recognize energy savings as profits. On the other side of that coin, however, is the failure of energy efficiency advocates to present a compelling case to corporate decision-makers. Top national experts share some guiding principles and warn about common pitfalls.

Solid-State Lighting: Major Opportunities and Risks
Rapid growth in solid-state¡ªor LED¡ªlighting is giving rise to a fair number of inferior products as well as spurious marketing claims that are detracting from the overall opportunities to retrofit commercial lighting systems. QC initiatives by the U.S. Department of Energy and utilities are driving the industry toward quality products, but professional advice is still important to avoid wasting money on LED retrofits.

Cracking The Small Business Market
The hardest clients to serve in the energy management and energy efficiency space are small businesses like independent retailers. Utilities offer a variety of ¡°direct-install¡± and ¡°pre- scriptive¡± programs, many of which are quite generous. This approach creates business for contractors and equipment suppliers who get on the utilities¡¯ vendor lists, but it leaves something to be desired from the perspective of maximizing energy-savings potential¡ªand fees for consulting firms that would design more customized energy efficiency projects. Consultants and vendors describe their strategies for approaching this market, including one firm that has developed proprietary sets of standardized energy-savings measures for three different types of businesses.